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National Press Release
 | Pointer Telocation Revenue Continues to Grow in Q3 2008Published 2008-11-13 05:23By Pointer Telocation Ltd |
Non-GAAP net Income Increased to $5.8M in the First Nine Months of 2008
EBITDA: Increased 105% to $11.9M in the First Nine Months of 2008
Financial Highlights:
Revenues: Pointer's revenues for the third quarter of 2008 increased by
68%, to
Gross Profit: For the third quarter of 2008, gross profit increased 76.2%
to
Operating Income: Pointer's operating income increased 145% to
Minority share: For the third quarter of 2008 and nine months ended
Net Income: Pointer presents net income of
Non GAAP net income: Pointer recorded non-GAAP net income of
EBITDA: Pointer's EBITDA for the third quarter of 2008 and for the first
nine months of 2008 was
Total Shareholders' Equity: Pointer's total shareholders' equity
increased by 18% during the first nine months of 2008 to
Conference Call Information:
Pointer Telocation's management will host a conference call with the investment community to review and discuss the financial results:
Conference call will take place today,
To listen to the call, please dial in to one of the following teleconferencing numbers. Please begin placing your call at least 5 minutes before the conference call commences.
From USA: +1-888-668-9141
From Israel: 03-918-0610
International: +972-3-918-0610
A replay of the conference call will be available through
Reconciliation between results on a GAAP and Non-GAAP basis.
To supplement the consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), the Company uses non-GAAP measures of net income and EBITDA. A reconciliation between results in a GAAP and Non-GAAP basis is provided in a table immediately following the Condensed Interim Consolidated Statements of Cash Flows. Net income is adjusted from results based on GAAP to exclude amortization of acquired intangible assets and deferred income tax, as well as certain business combination accounting entries and a non-cash expense due to a loan discount as part of a loan replacement. These non-GAAP financial measures are provided to enhance overall understanding of the Company's current financial performance and prospects for the future. Specifically, the Company believes the non-GAAP results provide useful information to both management and investors as these non-GAAP results exclude amortization of acquired intangible assets and deferred income tax, as well as certain business combination accounting entries, and a one-time non-cash expense due to a loan discount, that the Company believes are not indicative of our core operating results. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP.
Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. We believe that these non-GAAP measures help investors to understand our current and future operating cash flow and performance, especially as our three most recent acquisitions have resulted in amortization and non-cash items that have had a material impact on our GAAP profits. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.
Pointer also uses EBITDA as a non-GAAP financial performance measurement. EBITDA is calculated by adding back to net income interest, taxes, depreciation, amortization and minority interest. EBITDA is provided to investors to complement results provided in accordance with GAAP, as management believes the measure helps illustrate underlying operating trends in the Company's business and uses the measure to establish internal budgets and goals, manage the business and evaluate performance. EBITDA should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. A reconciliation of EBITDA to GAAP measures is also provided in a table following the Condensed Interim Consolidated Statements of Cash Flows accompanying this press release.
About Pointer Telocation:
Pointer Telocation is a leading provider of technology and services to
the automotive and insurance industries, offering a set of services including
Road Side Assistance, Stolen Vehicle Recovery and Fleet Management. Pointer
has a growing client list with products installed in over 400,000 vehicles
across the globe: the UK,
Safe Harbor Statement
This press release contains forward-looking statements with respect to the business, financial condition and results of operations of Pointer and its affiliates. These forward-looking statements are based on the current expectations of the management of Pointer, only, and are subject to risk and uncertainties relating to changes in technology and market requirements, the company's concentration on one industry in limited territories, decline in demand for the company's products and those of its affiliates, inability to timely develop and introduce new technologies, products and applications, and loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of the company to differ materially from those contemplated in such forward-looking statements. Pointer undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For a more detailed description of the risks and uncertainties affecting the company, reference is made to the company's reports filed from time to time with the Securities and Exchange Commission.
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
September 30, December 31,
2008 2007
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,447 $ 1,200
Trade receivables, net 16,234 11,756
Other accounts receivable and prepaid
expenses 2,703 2,001
Inventories 3,419 2,657
Total current assets 24,803 17,614
LONG-TERM ASSETS:
Long-term accounts receivable and deferred
expenses 612 337
Severance pay fund 5,540 4,866
Property and equipment, net 8,975 7,708
Deferred income taxes 1,058 941
Other intangible assets, net 16,431 18,058
Goodwill 55,598 50,712
Total long-term assets 88,214 82,622
Total assets $ 113,017 $ 100,236
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
September 30, December 31,
2008 2007
Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current maturities
of long-term loans $ 9,062 $ 10,564
Trade payables 10,725 8,001
Deferred revenues and customer advances 10,563 8,253
Other accounts payable and accrued expenses 5,184 6,123
Total current liabilities 35,534 32,941
LONG-TERM LIABILITIES:
Long-term loans from banks 24,135 18,460
Long-term loans from shareholders and others 3,321 5,767
Other long-term liabilities 245 89
Accrued severance pay 6,856 5,730
Convertible debentures - 1,979
34,557 32,025
MINORITY INTEREST 4,865 3,067
SHAREHOLDERS' EQUITY 38,061 32,203
Total liabilities and shareholders' equity $ 113,017 $ 100,236
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Year
Nine months ended Three months ended ended
December
September 30, September 30, 31,
2008 2007 2008 2007 2007
Unaudited
Revenues:
Products
$ 24,029 $9,172 $ 8,708 $ 3,400 $ 15,821
Services 34,567 26,184 12,003 8,921 35,806
Total revenues 58,596 35,356 20,711 12,321 51,627
Cost of revenues:
Products 12,837 5,850 4,725 2,184 9,414
Services 22,757 16,759 8,084 5,759 23,034
Amortization of
intangible assets 735 33 245 33 277
Total cost of
revenues 36,329 22,642 13,054 7,976 32,725
Gross profit 22,267 12,714 7,657 4,345 18,902
Operating expenses:
Research and
development, net 1,792 1,126 621 451 1,675
Selling and
marketing 5,408 3,360 1,931 1,117 4,934
General and
administrative 6,130 4,255 2,210 1,444 6,209
Amortization of
intangible assets 1,818 1,238 583 391 1,877
Total operating
expenses 15,148 9,979 5,345 3,403 14,695
Operating income 7,119 2,735 2,312 942 4,207
Financial expenses,
net 3,252 2,044 1,077 659 2,814
Other income
(expenses), net 19 (17) - (32) (12)
Income before taxes
on income 3,886 674 1,235 251 1,381
Taxes on income 320 357 90 70 353
Net income (loss)
before minority
interest 3,566 317 1,145 181 1,028
Minority interest 1,303 882 431 178 1,366
Net income
(loss) $ 2,263 $ (565) $ 714 $ 3 $ (338)
Basic net earnings
(loss) per share $ 0.49 $ (0.14) $ 0.15 $ 0.00 $ (0.08)
Diluted net
earnings (loss) per
share $ 0.48 $ (0.14) $ 0.15 $ 0.00 $ (0.08)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Year
Nine months ended Three months ended ended
December
September 30, September 30, 31,
2008 2007 2008 2007 2007
Unaudited
Cash flows from
operating
activities:
Net income (loss) $ 2,263 $ (565) $ 714 $ 3 $ (338)
Adjustments
required to
reconcile net
income (loss) to
net cash provided
by operating
activities:
Depreciation,
amortization and
impairment 5,036 3,415 1,613 1,096 5,273
Accrued interest
and exchange rate
changes of
convertible
debenture and
long-term loans 1,214 694 (30) 509 750
Accrued severance
pay, net 365 (80) 198 (89) (70)
Gain from sale of
property and
equipment, net (133) (149) 25 (10) (182)
Amortization of
deferred
stock-based
compensation 226 366 86 60 783
Minority interest
in earning of
subsidiary 1,303 1,241 431 387 1,366
Increase in trade
receivables, net (3,313) (1,648) (1,039) 346 (1,172)
Increase in other
accounts
receivable and
prepaid expenses (551) (559) 175 (11) (421)
Decrease
(increase) in
inventories (1,088) (317) (821) (448) (395)
Decrease
(increase) in
long-term
accounts
receivable and
deferred expenses 49 31 1 33 (141)
Write-off of
inventories 75 150 75 135 150
Increase in
deferred income
taxes - - - - (174)
Increase in trade
payables 1,958 756 1,821 293 730
Increase
(decrease) in
other accounts
payable and
accrued expenses 163 1,839 (1,418) 276 1,855
Net cash provided
by operating
activities 7,567 5,174 1,831 2,580 8,014
Cash flows from
investing
activities:
Purchase of
property and
equipment (2,537) (2,106) (761) (336) (2,638)
Proceeds from
sale of property
and equipment 512 759 133 258 860
Increase in
long-term
accounts
receivable (247) - (19) - -
Acquisition of
Cellocator (a) - (16,332) - (16,332) (16,571)
Acquisition of
other intangible
assets - (135) - - (117)
Net cash used in
investing
activities (2,272) (17,814) (647) (16,410) (18,466)
Cash flows from
financing
activities:
Receipt of
long-term loans
from banks 9,254 5,000 2,155 5,000 5,000
Repayment of
long-term loans
from banks (2,727) (3,392) (639) (1,446) (4,347)
Repayment of
long-term loans
from shareholders
and others (10,394) (2,024) (1,526) (684) (2,767)
Proceeds from
issuance of
shares and
exercise of
warrants, net 1,000 9,588 1,000 (5) 9,588
Short-term bank
credit, net (1,137) (441) (512) 406 (1,752)
Net cash provided
by (used in)
financing
activities (4,004) 8,731 478 3,271 5,722
Effect of
exchange rate on
cash and cash
equivalents (44) (61) 247 (113) 80
Increase in cash
and cash
equivalents 1,247 (3,970) 1,909 (10,672) (4,650)
Cash and cash
equivalents at
the beginning of
the period 1,200 5,850 538 12,552 5,850
Cash and cash
equivalents at
the end of the
period $ 2,447 $ 1,880 $ 2,447 $ 1,880 $ 1,200
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Nine months Three months Year
ended ended ended
December
September 30, September 30, 31,
2008 2007 2008 2007 2007
Unaudited
(a) Acquisition of
Cellocator:
Fair value of
assets acquired and
liabilities assumed
at date of
acquisition:
Working capital $ - $ (1,220) $ - $ (1,220) $ (1,323)
Property and
equipment - (151) - (151) (151)
Customer
relationships - (3,876) - (3,876) (3,943)
Brand name - (1,749) - (1,749) (1,775)
Developed
Technology - (4,886) - (4,886) (4,890)
Goodwill - (8,645) - (8,645) (8,750)
Accrued severance
pay, net - 107 - 107 20
- (20,420) - (20,420) (20,812)
Fair value of
shares issued - 1,428 - 1,428 1,430
Fair value of
convertible
debentures - 1,952 - 1,952 1,951
Accrued expenses - 708 - 708 860
- 4,088 - 4,088 4,241
$ - $ (16,332) $ - $ (16,332) $(16,571)
Reconciliation Tables of Non-GAAP Measures
U.S. dollars in thousands
Reconciliation of GAAP net income to non-GAAP net income is as follows:
Year
Nine months ended Three months ended ended
December
September 30, September 30, 31,
2008 2007 2008 2007 2007
Unaudited
Net income (loss)
as reported $ 2,263 $ (565) $ 714 $ 3 $ (338)
Amortization of
intangible assets
and impairment of
long-lived assets 2,553 1,241 828 424 2,154
Loan Discount 704 - 9 - -
Taxes on income 320 357 90 70 353
Non-GAAP Net income
$ 5,840 $ 1,033 $ 1,641 $ 497 $ 2,169
Reconciliation of GAAP net income to EBITDA
To supplement the consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), the Company uses EBITDA as a non-GAAP financial performance measurement. EBITDA is calculated by adding back to net income interest, taxes, depreciation, amortization and minority interest. EBITDA is provided to investors to complement results provided in accordance with GAAP, as management believes the measure helps illustrate underlying operating trends in the Company's business and uses the measure to establish internal budgets and goals, manage the business and evaluate performance. EBITDA should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. Reconciliation of the GAAP to non-GAAP operating results is as follows:
CONDENSED EBITDA
US dollars in thousands
Year
Nine months ended Three months ended ended
December
September 30, September 30, 31,
2008 2007 2008 2007 2007
Unaudited
Net income (loss) $
as reported $ 2,263 (565) $ 714 $ 3 $ (338)
Non GAAP
adjustment:
Financial expenses,
net 3,252 2,044 1,077 659 2,814
Taxes on income 320 357 90 70 353
Depreciation and
amortization 4,719 3,061 1,525 1,002 4,787
Minority interest 1,303 882 431 178 1,366
EBITDA $
$ 11,857 5,779 $ 3,837 $ 1,912 $ 8,982
Contact:
Zvi Fried, V.P. and Chief Financial Officer
Tel: +972-3-572 3111
E-mail: zvif@pointer.com
Yael Nevat, Commitment-IR.com
Tel: +972-9-741 8866
E-mail: yael@commitment-IR.com
SOURCE Pointer Telocation Ltd
